Sinopec's largest oil refinery, Zhenhai Refining & Chemicals Branch, broke out yesterday with losses: In two months, losses due to high crude oil prices have now reached 1.368 billion yuan. It seems to indicate that in the current situation, the more refinery companies process more and lose more. Xiao Hui, an analyst at United Securities, believes that in order to achieve the CPI target of 4.8% for the whole year, the country will not allow resource products to rise in price in the short term, and will compensate for the losses of the refinery companies through subsidies.
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Zhenhai Refining & Chemical is a wholly-owned subsidiary of Sinopec, and currently belongs to the largest domestic oil refining company. Last year, it processed 18.61 million tons of crude oil, accounting for 12% of Sinopec and 6% of the country.
The significant loss of Zhenhai Refining and Chemicals reveals only the tip of the iceberg of Sinopec's oil refining business. According to the person in charge of Chen Xing of Zhanjiang Dongxing Petroleum Enterprise Co., Ltd., the person in charge of the report told the reporter that the current international crude oil price exceeded 100 US dollars per barrel. Most of the crude oil needed for Sinopec's system refineries is imported in accordance with international oil prices, while domestic refined oil prices are subject to macro-control. Far less than the crude oil import price, implementation of tight control, and the emergence of crude oil prices upside down situation, due to the formation of large losses in refining business, the Ministry of Finance last month subsidized China Petroleum & Chemical Corporation 12.3 billion yuan. Among them, 4.9 billion was included in the 2007 subsidy income; 7.4 billion was included in the subsidy income in the first quarter of this year.
The person in charge of surnamed Chen stated that when the crude oil price was more than 70 US dollars per barrel in July last year, the State Development and Reform Commission once raised the ex-factory price of refined oil twice in a month, which to a certain extent made up for the losses of refinery companies. This year crude oil prices broke through. At 100 US dollars per barrel, at present, their company loses more than 1,000 yuan per ton of oil.
It is reported that Sinopec has 29 Yanshan Petrochemical Co., Ltd., Shijiazhuang Refinery, Qilu Petrochemical Company, Guangzhou Petrochemical General Plant, Zhanjiang Dongxing Petroleum Enterprise Co., Ltd. and 29 refining companies. In 2006, a total of 157 million tons of crude oil were processed.
Oil inversion effect is hard to improve in the short term
How to digest the cost of crude oil that accounts for more than 70% of production costs? The person in charge of the above-mentioned Sinopec stated that companies within the Sinopec system have made articles on imported crude oil purchases. For example, if you select oils, Sinopec's oil refining companies only eat high-quality crude oils such as low-sulfur crude oil and light crude oil. Nowadays, companies choose a wider range of crude oil and can refine high-quality oils. They will all purchase heavy, high-sulphur products. Crude oil is set to be in the long-term direction and effectively control the cost of crude oil. According to the current trend of sharp rise in crude oil prices, the company has made adjustments to the progress of crude oil purchases and refining production plans, reduced the rallies, and absorbed them on dips.
Xiao Hui, an analyst at Sinopec's petrochemicals industry, pointed out that the upside down of crude oil prices and refined oil prices could not be improved in the short term. Because February's CPI was 8.7%, the government expects 4.8% for the whole year. To prevent inflation, the government will impose price controls on resource products and will not allow resource products to increase prices in the short term.